DreamWorks Animation, Netflix in Streaming Deal

via DreamWorks Animation, Netflix Finalizing Streaming Deal – The Hollywood Reporter

DreamWorks Animation, Netflix Finalizing Streaming Deal

5:00 PM 7/24/2011 by Kim Masters, George Szalai

DreamWorks Animation and Netflix have been putting the finishing touches on a streaming rights deal for DWA films that could be announced in the coming days.

According to a source familiar with the situation, the animation studio, which has a film output deal with Time Warner’s HBO that expires in 2014, and the streaming video powerhouse have reached an agreement.

According to Bloomberg News, the deal would kick in after the pay TV agreement with HBO expires, but a source tells THR that HBO has offered to end DWA’s output deal two years early because HBO recently signed a pact with Summit Entertainment that gives the pay cabler 10-12 live action films a year versus the two animated films a year that DWA offers. Plus, animated fare is more common now that HBO content partners Warner Bros., Fox and Universal are all producing those films.

Netflix is scheduled to report its latest quarterly results after the market close on Monday, and DWA is set to report Tuesday afternoon, fueling expectations that a deal could be unveiled sooner rather than later.

It wasn’t immediately clear how a streaming deal would affect future pay TV output deals for DWA.

DWA and Netflix spokespeople declined comment. HBO was not available for comment.

Analysts have predicted that Netflix would push for more streaming content deals, while they have said that DWA may look for new ways to make money off its content. DWA.

DWA and Netflix spokespeople declined to comment.

Analysts have predicted that Netflix would push for more streaming content deals, while they have said that DWA may look for new ways to make money off its content.

Blackbird Brief: With some recent stumbles in the public’s eye, Netflix needs to rebound with some strong news.  The best way to do that is by providing consumers more of what they really want: content. With Apple’s rumored pursuit of Hulu, Netflix needs to continue to differentiate itself from other streaming providers by providing a higher quality of content. This should be the first step in that process. Netflix is now at a very vulnerable position in the market. Exclusive streaming contracts with major studios will be expiring soon and with costs projected to multiply by 10X or more in the next round of negotiations with the studios, more price hikes are expected sooner rather than later. However, the biggest concern Netflix should have would be that a content provider like Sony decides to launch a competing platform on their own devices like the PS3 and TV sets or that Apple and its enormous pile of cash decides to enter the streaming market. Either way, it is an interesting time in the market for Netflix.